Success – and Measuring Success
How do you measure how much a loved one loves you?
Maybe by the flowers they send. Or the attention they pay to you. Or the look in their eyes when they talk to you, or their curiosity about what you’re doing lately.
You could, in fact, measure each one of those things. Some are easy, like flowers. Others, like curiosity, need decomposing into second-level indicators – how many questions they ask you, the operative pronoun in those questions. The point is, you could do it.
But would you?
Would you ever mistake the measure itself—roses, say—for the love they purport to measure? Of course not. It seems silly to equate the two; the poor sucker who does so is sadly self-deluded and likely unlucky in love.
Roses may be the measure of love–but are not love itself.
Now switch to business. How do you measure success in business? How about by the profits you make? After all, if you create great products that meet real needs in the marketplace and add real value in a customer-delighting manner—well, you’ll get rewarded for it, in the form of profits.
Profits are to business what roses are to love–measures.
So, would you ever mistake the measure—profits—for the success they purport to measure? Do profits really equal success?
Unlike love-and-roses, all too often our answer is ‘yes.’ Yes, we say, the whole point of business is to make profits. Success consists of making money. It seems silly, we say, to differentiate between the two–the poor sucker who does so is sadly self-deluded and likely to get fleeced by sharper competitors.
In amore, we know the difference between love itself and pale trailing indicators of its recent presence. But in business, we confuse the yardstick with length itself; we’ve lost the ability to distinguish maps from reality.
When did profit move from being a measure of success, to being iconized as success itself?
Thinking that the point of business is to make money is like thinking the point of living is to eat. Profit is a byproduct of doing great business—an indicator. Not a goal.
If all you focus on is roses, you’ll at least have flowers at the end of the day; but you’ll fail at love. In business, if all you focus on is profits, you won’t even get that. Because, simply, we don’t trust people who are only in it for the money.
Charlie here’s a thought, albeit a naive & unsubstansiated one. Perhaps we started moving profit from being a measure of success, to being iconized as success itself when we (as a country) started going "public". We started selling privately owned businesses to venture capitalists, investment houses & foreign entities, who then turned around and cannibalized, broke apart, and sold off sections – piece by piece for large amounts of money. Privately owned businesses had an owner (or a family) that took pride in their business, products & reputation. Profit was an offshoot of building a successful business. Shareholders care about only one thing…share value by quarter. VC & investments banks at least are upfront about being in it only for the $$$$$ and could care less about reputation, etc. We sold our "souls to the devil" for the quick profit.
I agree Barabra. For many self-worth=net worth….more’s the pity when the bloom is off the rose…what then for these folks?
http://www.thejobtrekker.com/
I think that we all have an issue with this, in this day and age we are all trying to figure out what we are really worth. It comes down to ones real self evaluation, growth and why you grow as a person. If you only make an effort to grow for money, then your self worth will always equal your net worth. so as the market fluctuates your self worth will too. It is time as a people and nation to evaluate ourselves fully to grow.
Great post and point, Charlie. Liked it so much, I had to feature it over at my blog….
http://compforce.typepad.com/compensation_force/2009/04/measuring-love-and-profits-a-cautionary-note.html
Enjoyed the post- I got to it through Ann Bares’ post, which I got from Workforce Week.
The thought which occurred to me in reading her note and yours, is that you have said what business success isn’t from your standpoint (profits), you have suggested that trust is key- perhaps a necessary and sufficient condition- but you haven’t made any real assertions about what business success is. You mention great products meeting real needs and adding real value in a customer-delighting manner, but I’m not hearing you argue that any one of those components is the key, or that the sum of those components is how success is defined.
Some can talk about fulfillment, pride in ownership, etc- but from my perspective, those are measures of success for individuals who work for the company, not the company itself. I see the company as separate from the people in it- it is a legal entity (a non-entity or a commonly accepted fiction even)- the publicly held company exists to shield the employees, investors and others from liabilities, yet allow them to exploit profit opportunities.
I am familiar with individuals and groups who have developed for-profit ventures that also have strong socially-conscious motives and outcomes- Mohammed Yunus and the Grameen Bank come to mind, so one could argue that in those cases the profit is a facilitator, and there are other clear measures of success. Even here, though, these are the motives of the individuals developing the company- the company itself is again a legal entity that produces cash for the purposes decided by the individuals.
Perhaps the follow up post on what business success is would go towards the idea that success is defined for each business on a case by case basis, and that profit is simply the shorthand measure which allows the intellectually lazy to compare the outcomes of one company to another. Perhaps it depends on whether one is defining business success for oneself or for the company, or how one defines just what a business or a company is.
Anyway, thanks for provoking the thoughts.
Dana, thanks (and thanks to Ann Bares again too) for offering up such great thoughts. I like your last paragraph for a good statement about the value of profits.
The larger question of defining success for a company (or organization, more generally) is similarly interesting, and you teed it up nicely.
For what it’s worth,here’s my take.
First of all, "success" is a word which when applied to "a legal entity (a non-entity or a commonly accepted fiction even" is a bit misplaced. Can a car be succcessful? A giraffe? A highway? How less apropos when applied to a legal fiction?
I think "success" is a once-removed adjective when applied to organizations; it’s got to refer to something derivative.
But never mind, it still makes commonsense, and we say it in any case. So I’d say a successful organization is like a successful marriage–to sum it up in one word is a sacrilege. A successful organization will create jobs, add economic value, excite employees and consumers, create a mini-environment that fosters personal development, that exemplifies ethical and social behavior better than the average of comparable organizations…
What’s a successful parent? A sucscessful child? A relationship? For companies, "profit" does, in the long run, provide a good indicator–but a good indicator doesn’t mean success. No one measure can do it.
And so it is with organizational success, or so it seems to me.
Charlie, while following these comments, I was taken back to a commencement address that david maister included in his blog about a year ago. It’s entitled, "being a happy & sucessful lawyer". There were some very keen insights from this "successful lawyer" to a group of young, bright-eyed, eager graduates on the meaning & measure of success. Very interesting and highly related reading. The post is still still accessible on his blog site.
post # 546 — Wednesday, June 11, 2008
Being a Happy and Successful Lawyer
Stephen C. Ellis is the managing partner at the law firm of Tucker, Ellis & West.